Beijing blocks Nvidia sales in vote of confidence for Chinese chipmakers, the White House strikes a deal for 10 percent of Intel, and Commerce voids a $7.4B CHIPS Act grant

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Worth Knowing

Nvidia Plans Powerful Chip for China, but Beijing Says It’s Not Interested: China’s internet regulator has ordered technology companies to halt purchases of Nvidia’s AI chips and cancel existing orders, the Financial Times reported Wednesday. The Cyberspace Administration of China directed firms, including ByteDance and Alibaba, to cancel orders for Nvidia’s RTX6000D chip, the U.S. company’s latest chip for the Chinese market. In recent months, Beijing had begun to pressure tech companies to avoid American chips, with state media raising concerns about backdoors and spyware in Nvidia’s products. Now that pressure seems to have escalated into an outright prohibition. Beijing’s motivations remain unclear: the move could be a sign of confidence in China’s domestic chipmakers’ ability to produce competitive AI chips, or it could be a shrewd tactical move to get access to better-performing U.S. chips. Last month, Reuters reported that Nvidia was developing a more powerful AI chip for the Chinese market, dubbed the “B30” or “B30A,” based on the company’s latest Blackwell architecture. According to Reuters, the chip would stay within current U.S. export control thresholds, but would still significantly outperform the RTX6000D and H20, Nvidia’s current high-end, China-only offerings. But if the fight over H20 exports is any indication, getting approval for B30A exports would be an uphill battle; the Trump administration had banned H20 sales in April 2025 over concerns about its capabilities, only for the White House to reverse course months later following intensive Nvidia lobbying. That move earned significant pushback, including from inside the president’s own party. Late last month, House Select Committee on China Chair John Moolenaar (R-MI) proposed a “rolling technical threshold” in a letter to Commerce Secretary Howard Lutnick. The plan, if implemented, would limit chip sales to a “marginal improvement” over China’s domestic capabilities — a standard that would likely bar sales of the B30A. By cancelling RTX6000D and H20 orders, Beijing could be making clear it won’t settle for “marginal improvements,” or it could be cutting the cord for good.
OpenAI and Anthropic Look to Clear Major Hurdles With Recent Deals: Two recently announced deals seem likely to resolve long-simmering tensions at the heart of AI development:
  • Last week, OpenAI, Microsoft, and OpenAI’s controlling nonprofit board reached a tentative agreement that paves the way for a major restructuring of the AI lab’s corporate governance. Founded as a non-profit in 2015, OpenAI’s leadership team has sought to transition to a more traditional business model as both the popularity of its products and the costs associated with creating them have grown dramatically. The deal would give OpenAI’s nonprofit board an approximately $100 billion equity stake — roughly 20% of the company’s hoped-for $500 billion valuation. While the terms of the lab’s deal with Microsoft — whose approval OpenAI needed to undertake the governance change — remain confidential, observers think it likely scrapped an earlier agreement that would have terminated Microsoft’s access to OpenAI’s technology once the board declared “artificial general intelligence” had been achieved. The deal is an important step in OpenAI’s transition, but it will still need the sign-off of the Delaware and California attorneys general before it can take effect.
  • Anthropic agreed to pay $1.5 billion to settle a class-action lawsuit filed by authors who accused the company of training Claude on pirated books. While a federal judge ruled in June that AI training itself constituted fair use, he found Anthropic liable for acquiring millions of copyrighted works from illegal online pirate libraries. The settlement — seemingly the largest such settlement ever — awards roughly $3,000 per book to affected authors and requires Anthropic to destroy all pirated content. The settlement still needs to be approved by the judge in the case, and the company could face future lawsuits if its models output copyrighted material.
If approved, both deals would resolve significant concerns that had plagued two of the AI industry’s biggest players. While neither issue seemed intractable, the question was always the price tag. The costs — $100 billion for OpenAI and $1.5 billion for Anthropic — are astronomical, but both companies’ latest valuations make those sums tolerable: approximately $500 billion for the former and $183 billion for the latter.
Government Updates

Trump Administration Strikes Landmark Deal to Take 10% Share of Intel: The U.S. government will take an unprecedented 9.9% ownership stake in Intel in an $8.9 billion deal announced August 22. The deal won’t require new appropriation from Congress, as it converts previously allocated, but not yet delivered, 2022 CHIPS Act funding ($5.7 billion) and Defense Department “Secure Enclave” program money ($3.2 billion) into common stock. According to Intel, the government’s role will be passive — it will vote with Intel’s board on most matters and won’t take a board seat, but it did secure a five-year warrant to buy an additional 5% stake if Intel ever loses majority control of its foundry business. That effectively locks the company into manufacturing, which the deal seems designed to ensure. Intel, the last major leading-edge semiconductor manufacturer based in the United States, has been struggling to keep up with competitors like Nvidia and AMD that design their own chips but outsource manufacturing to contract chipmakers like Taiwan’s TSMC and South Korea’s Samsung. In July, Intel warned that it was struggling to find customers for its next chip node and said it may have to exit leading-edge manufacturing entirely as a result. While CHIPS Act incentives have lured some chipmaking back to the United States, the Trump administration apparently wasn’t content relying on foreign companies like TSMC and Samsung for such a critical technology. Nevertheless, the timing and scale of the announcement came as a surprise. President Trump had been publicly criticizing Intel CEO Lip-Bu Tan’s Chinese business ties earlier in August, but the tone shifted after a face-to-face meeting, with Trump saying that Tan “walked in wanting to keep his job and he ended up giving us $10 billion for the United States.” Despite the powerful backing of the U.S. government, Intel still faces an uphill battle: the investment doesn’t fix its issues securing customers, and the company warned it could complicate its business abroad. But perhaps more significantly, the deal — and President Trump’s comments that he wants “many more” like it — raised concerns that it could herald a new era of state intervention in the market during the president’s second term.

Google Avoids Breakup in Antitrust Ruling but Must Share Key Data: A federal judge ordered Google to share key data with competitors but stopped short of breaking up the company in a ruling issued earlier this month, capping a landmark antitrust case brought by the Justice Department during the first Trump administration. Last year, Judge Amit Mehta ruled that Google had illegally maintained a monopoly in the search engine market. Some had hoped that this month’s remedies decision could go as far as forcing Google to divest key assets — such as its Chrome web browser and the Android operating system — or prohibit it from making distribution deals with partners, such as its $20 billion per year search agreement with Apple. Instead, Judge Mehta imposed more modest restrictions: Google must provide its search index and user-interaction data to qualified competitors, offer search and advertising syndication services to potential rivals, and is barred from striking exclusive distribution deals with partners. Mehta explicitly cited the rapid rise of AI as justification for his relatively light touch, noting that companies like OpenAI “already are in a better position, both financially and technologically, to compete with Google than any traditional search company has been in decades.” Mehta concluded that forcing a breakup was unnecessary given new competitive pressures from generative AI, writing that his remedies aim to ensure Google’s search monopoly “does not carry over into the GenAI space.” While a divestiture of Chrome could have dramatically reshaped AI development — both OpenAI and Perplexity reportedly expressed interest in acquiring the browser — Judge Mehta’s decision leaves the competitive landscape largely intact. The data-sharing requirements may provide some boost to AI rivals, allowing companies like OpenAI, Anthropic, and Perplexity to access Google’s comprehensive web index to improve their own search capabilities. However, observers noted that even with this data, meaningfully challenging Google’s position would be “astronomically expensive” and unlikely to succeed. Google has said it will appeal the ruling.

Commerce Voids $7.4 Billion Grant for Semiconductor Research Nonprofit: Last month, the Commerce Department announced it would strip the National Center for the Advancement of Semiconductor Technology (Natcast) — the nonprofit operator of National Semiconductor Technology Center — of its $7.4 billion federal grant. Commerce Secretary Howard Lutnick declared the Biden-era agreement “invalid” and transferred responsibility for the NSTC to the National Institute of Standards and Technology. Natcast was initially established as “SemiUS” in 2023 as a private nonprofit to operate the NSTC, a public-private consortium mandated by the CHIPS Act to conduct advanced semiconductor research. Natcast received the vast majority of its $7.4 billion through an agreement reached during the waning days of the Biden administration earlier this year. But a Justice Department memo published on September 2 argued the decision to create a nonprofit was outside the Commerce Department’s authority. Lutnick characterized Natcast as a “semiconductor slush fund” designed to “line the pockets of Biden loyalists.” The decision has left several recently announced NSTC projects in uncertain states, including an $825 million facility in Albany and a $1.1 billion advanced packaging lab planned for Arizona State University. The Commerce Department has not announced how funding will be allocated under NIST management.

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